51. What are the minimum requirements an actuary should consider to be qualified to render opinions related to Long-Term Care Policies under the U.S. Qualification Standards (USQS)?
Pricing and reserving for Long-Term Care (LTC) policies typically involve aspects of both life insurance and health insurance. An actuary may find that the initial and renewal rate filings and reserving are inter-related and may require specific actuarial opinions for LTC policies.
A credentialed actuary who issues an LTC Statement of Actuarial Opinion (SAO) when providing Actuarial Services must satisfy the requirements contained in the USQS. Some of the primary requirements that an actuary should consider are
1. The actuary must first meet the Basic Education and Experience Requirements for the primary practice area(s) in which the actuary intends to provide an SAO. For instance, if the actuary will be rendering an SAO regarding LTC insurance, the actuary must be a fully qualified member of an International Actuarial Association (IAA)-member organization, have three years of responsible actuarial experience, and be knowledgeable of the Law applicable to the SAO (see Section 2.1 of the USQS).
2. Consistent with Section 2.1 of the USQS, the actuary must be familiar with the Law applicable to LTC Statements of Actuarial Opinion. Per the Code of Professional Conduct, “Law” is defined to include statutes, regulations, judicial decisions, and other statements having legally binding authority.
3. If the area of practice to which the SAO applies is new to the actuary, then USQS section 4 must be met.
4. If the SAO involves one of the Specific Qualification Standards SAOs, namely, the actuary is signing an NAIC Annual Statement opinion, the actuary must meet the requirements of section 3 of the USQS as well.
6. Per USQS section 2.2, actuaries must remain “current on emerging advancements in actuarial practice and science that are relevant to the Actuarial Services [as defined in the Code of Professional Conduct (Code)] they provide.” This section involves keeping up to date on continuing education relevant to an actuary’s practice. In light of the requirements of Precept 2 of the Code and the General Qualification Standard under section 2 of the USQS, an actuary issuing an LTC-related SAO should ensure that at least some of their continuing education relates directly to LTC-related topics.
Last updated February 2017